WDAY Stock’s Gains Following Q1 Beat Fails to Unite Wall Street – This Analyst Believes Post-Earnings Rise Feels More Like Relief Rally

• Needham analysts stated that the post-earnings rise in Workday shares is more like a relief rally against a low bar.
• Despite the Q1 beat, Workday reaffirmed its full-year revenue guidance, prompting Needham to cut its second-half revenue forecast by 40 basis points.
• Analysts at Citi trimmed their price target for Workday to $139 from $148, while keeping a ‘Neutral’ rating on the stock.

Shares of Workday Inc. (WDAY) surged on Friday after the company’s first-quarter (Q1) earnings surpassed Wall Street expectations, but analysts are divided on whether WDAY's stock rally has legs.

Workday shares were up more than 7% in Friday’s opening trade and were among the top trending tickers on Stocktwits at the time of writing.

Wall Street Divided On WDAY

According to TheFly, analysts at Needham lowered their price target for Workday to $180 from $300, while keeping a ‘Buy’ rating on the stock.

Needham analysts stated that the post-earnings rise in Workday shares is more like a relief rally against a low bar. Despite the Q1 beat, Workday reaffirmed its full-year revenue guidance, prompting Needham to cut its second-half revenue forecast by 40 basis points.

Analysts at Citi trimmed their price target for Workday to $139 from $148, while keeping a ‘Neutral’ rating on the stock.

While raising its price target to $140 from $115, Jefferies kept a ‘Hold’ rating on Workday, noting that delayed deals in the fourth quarter (Q4) helped fuel the company's strongest Q1 net new annual contract value growth in five years.

The firm added that weaker-than-expected remaining performance obligations guidance suggests management did not carry the quarter's outperformance into fiscal 2027 expectations.

WDAY’s Operating Margin Outlook Draws Some Optimism

Analysts at KeyBanc were encouraged by Workday's increased full-year operating margin forecast of 30.5%, viewing it as evidence that the company can drive innovation and AI adoption while continuing to improve profitability.

The firm said the setup supports a favorable risk-reward profile at current valuation levels. KeyBanc raised its price target to $158 from $155, while keeping an ‘Overweight’ rating on the stock.

Piper Sandler said Workday's Q1 beat and growing AI monetization efforts stand out at a time when many software companies are facing heightened deal scrutiny and concerns about AI-driven disruption. The firm raised its price target for WDAY to $145 from $135 while maintaining a ‘Neutral’ rating.

WDAY’s Q1 At A Glance

Workday reported earnings per share (EPS) of $2.66, up from $2.23 during the year-ago period. The company’s revenue came in at $2.54 billion, up from $2.24 billion in the same period a year ago.

Wall Street expected Workday to report EPS of $2.52 on revenue of $2.52 billion, according to Fiscal.ai data.

How Did Retail Investors React To WDAY?

Retail sentiment on Stocktwits around Workday trended in the ‘extremely bullish’ territory with message volumes at ‘extremely high’ levels at the time of writing.

WDAY stock is down 38% year-to-date and 51% over the past 12 months. The S&P 500 ETF (SPY) is up 28% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 40%.

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